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First Nations wading through gambling’s grey zone

The Offshore Gamble
The Offshore Gamble - SaltWire Network

Deal with Atlantic provinces gives First Nations lucrative VLTs but limits other gambling

Editor’s Note: The following is the third in a three-part series that ran Tuesday, Wednesday and today on the grey area of offshore online gambling.


Online gaming isn’t something the First Nations communities in Atlantic Canada want to bet on, says John Paul, executive director of the Atlantic Policy Congress of First Nations Chiefs Secretariat.
But a former chief of the Tobique First Nation in western New Brunswick says not so fast.
“Online gaming worldwide is $4 trillion (US),” said Gerald Bear, who was the chief of the Tobique First Nation from 2006 through to 2008, in an interview.
“That’s a tremendous amount of interest in gaming worldwide.”
Even a small slice of the worldwide online gaming pie could make a big difference to First Nations communities in Atlantic Canada, said Bear.
“Even if you just get a sliver of that income, it’s significant,” he said. “It could be very lucrative.”
Throughout the Atlantic region, most First Nations have inked deals with provincial governments whose Atlantic Lottery Corp. handles gaming in Nova Scotia, Newfoundland and Labrador, Prince Edward Island and New Brunswick.
Under those deals, First Nations governments got the green light to have such things as the profitable video lottery terminals for their gaming commissions, but that came at a price, said Bear.
“It ties their hands,” he said. “They don’t have the carte blanche to deal with gaming in their own communities the way they are technically allowed to do so.”
Treaty and aboriginal rights guaranteed in the constitution allow First Nations people to have gambling operations, including online gaming, in their communities, said Bear.
Murray Marshall, general counsel to the major online gaming industry player Kahnawake Gaming Commission, agrees.
Underpinning the Kahnawake Gaming Law which came into effect 21 years ago is that First Nation’s claim that it has an inherent indigenous jurisdiction over gaming and gaming activities within and from its territory in Quebec, Marshall said in an interview.
“The law has never been challenged,” he said. “The only occasion on which the law and the commission’s regulations were considered in a Quebec Court was in the 2007 case of Horne vs. Kahnawake Gaming Commission et al. where the Superior Court held in favour of the commission.”
But even Marshall admits that case did not expressly deal with the issue of First Nations jurisdiction over gaming. Across the country, the right of First Nations communities to get into online gaming is still something of a grey zone, with no law or court case expressly recognizing those specific rights.
When asked about online gaming in First Nations communities, New Brunswick’s provincial government officials insist gambling is a uniquely provincial jurisdiction.
“The Criminal Code of Canada prohibits gambling unless it is either conducted by a province or its agent or licensed by a province and that the conduct must be in accordance with laws established by that province,” said Geneviève Mallet-Chiasson, a spokesperson for the New Brunswick Department of Justice and Public Safety, in an interview.
“In New Brunswick, the Gaming Control Act provides the authority for gambling activity in the province,” said Mallet-Chiasson. “The Atlantic Lottery Corporation provides some gaming online through its online portal. Otherwise, New Brunswick has not authorized online gambling in the province.”
Gamblers are free under Canadian law to bet on the thousands of websites reportedly based in Cyprus, the Isle of Man, and Gibraltar. That’s not illegal.
But it’s less clear whether offshore operators of online gaming websites are free to accept those bets from Canadians, advertise or ink contracts in Canada. That has not yet been settled with a precedent in Canadian courts.
That’s not stopping the Kahnawake Gaming Commission from doing a brisk business in online gaming.
That gaming commission, which was listed as having annual revenues of almost $796,000 in the Mohawk Council of Kahnawake’s 2016-2017 annual budget, has inked 20 deals with clients to host 99 online gaming websites. Marshall said the potential for the hosting and licensing of online gaming sites by the Kahnawake Gaming Commission is virtually unlimited.
The gaming commission’s legal counsel would not divulge how much of those gambling revenues stem from the gaming commission’s online gaming operations but claimed these have created roughly 250 direct and indirect jobs, many of them filled by band members.
“Licensing fees are intended to offset the costs of its operations,” said Marshall. “(The Mohawk Council of Kahnawake’s) Mohawk Internet Technologies charges its customers for the services it provides to them based on consumption of rack space, bandwidth and electricity.”
Although there are currently no First Nations communities in Atlantic Canada known to be actively working on the establishment of online gaming operations, the Kahnawake Gaming Commission’s management is interested in making that happen.
“We encourage and are willing to work with other First Nations in Canada and tribes in the United States who are interested in developing their economies through online gaming,” said Marshall.


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